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                                                                   EXHIBIT 10.5




                           NOTE SECURED BY REAL ESTATE

$3,000,000                Greeneville, Tennessee                 March 25, 1999


         FOR VALUE RECEIVED, the undersigned, LANDAIR TRANSPORTATION PROPERTIES,
INC., a Tennessee corporation ("Maker"), promises to pay to the order of FIRST
TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association with offices
in Greeneville, Tennessee ("Payee"; Payee and any subsequent holder[s] hereof
are hereinafter referred to collectively as "Holder"), without grace, at the
office of Payee at 2841 East Andrew Johnson Highway, Greeneville, Tennessee
37745, or at such other place as Holder may designate to Maker in writing from
time to time, the principal sum of THREE MILLION AND NO/100 DOLLARS
($3,000,000.00), together with interest on the outstanding principal balance
hereof from date at an annual rate of seven and five one-hundredths percent
(7.05%) per annum; provided that in no event shall the rate of interest payable
in respect of the indebtedness evidenced hereby exceed the maximum rate of
interest from time to time allowed to be charged by applicable law (the "Maximum
Rate"). Interest shall be calculated on the basis of a 360-day year to the
extent permitted by applicable law.

         The principal amount owed hereunder, together with accrued interest
thereon, shall be due and payable in equal monthly payments of $27,048.78 each
on the 25th day of each successive month commencing on April 25, 1999 through
and including March 25, 2004, at which time the entire outstanding principal
balance, together with all accrued and unpaid interest, shall be immediately due
and payable in full. The said monthly payment is calculated based on an assumed
amortization period of fifteen (15) years at the interest rate specified above.
The undersigned recognizes and acknowledges that a principal balance shall
therefore be due on said maturity date.

         All payments in respect of the indebtedness evidenced hereby shall be
made in collected funds, and shall be applied to principal, accrued interest and
charges and expenses owing under or in connection with this Note in such order
as Holder elects, except that payments shall be applied to accrued interest
before principal.

         The indebtedness evidenced hereby may be prepaid in whole or in part,
at any time and from time to time, without penalty or premium except that, (i) a
penalty of two percent (2%) of any portion of the principal amount hereof which
is prepaid within the first twelve month period following the date hereof shall
be due and payable to Holder upon such prepayment, and (ii) a penalty of one
percent (1%) of any portion of the principal amount hereof which is prepaid
within the second twelve month period following the date hereof shall be due and
payable to Holder upon the date of such prepayment. Partial prepayments shall be
applied to installments hereunder in such order as the Holder hereof shall
determine in its sole discretion.


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         Time is of the essence of this Note. It is hereby expressly agreed that
in the event any default shall occur:

         (i) in the payment of principal or interest as stipulated above and
such default continues for more than ten (10) days after written notice to Maker
(provided that Maker shall only be entitled to such ten-day grace period twice
within any twelve-month period); or

         (ii) under that certain Mortgage Deed executed by Borrower for the
benefit of Payee dated as of the date hereof (the "Mortgage"); or

         (iii) under that certain Guaranty Agreement executed by Landair
Corporation (the "Guarantor") and the Payee dated as of the date hereof (the
"Guaranty Agreement"); or

         (iv) under that certain Loan and Security Agreement between Guarantor
and the Payee dated as of September 10, 1998 or any other document relating to
the indebtedness of Guarantor described in, or evidenced by, such Loan and
Security Agreement; or

         (v) under any other instrument or document now or hereafter further
evidencing, securing or otherwise relating to the indebtedness evidenced hereby,

and such default is not cured within any applicable grace or cure period with
respect thereto; then, and in such event, the entire outstanding principal
balance of the indebtedness evidenced hereby, together with any other sums
advanced hereunder, under the Mortgage and/or under any other instrument or
document now or hereafter evidencing, securing or in any way relating to the
indebtedness evidenced hereby, together with all unpaid interest accrued
thereon, shall, at the option of Holder and without notice to Maker, at once
become due and payable and may be collected forthwith, regardless of the
stipulated date of maturity. Upon the occurrence of any default as set forth
herein, at the option of Holder and without notice to Maker except as expressly
set forth herein, all accrued and unpaid interest, if any, shall be added to the
outstanding principal balance hereof, and the entire outstanding principal
balance, as so adjusted, shall bear interest thereafter until paid at an annual
rate (the "Default Rate") equal to the lesser of (i) the rate that is four
percentage points (4.0%) in excess of the above-specified interest rate, as it
varies from time to time, or (ii) the Maximum Rate, regardless of whether there
has been an acceleration of the payment of principal as set forth herein. All
such interest shall be paid at the time of and as a condition precedent to the
curing of any such default.

         To the extent permitted by applicable law, Maker shall pay to Holder a
late charge equal to five percent (5%) of any payment hereunder that is not
received by Holder within five (5) days of the date on which it is due, in order
to cover the additional expenses incident to the handling and processing of
delinquent payments; provided, however, that no late charge will be imposed on
any payment made on time and in full solely by reason of any previously accrued
and unpaid late charge; and provided further that nothing in this paragraph
shall be deemed to waive any other right or remedy of Holder by reason of
Maker's failure to make payments when due hereunder.

                                                    

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         In the event this Note is placed in the hands of an attorney for
collection or for enforcement or protection of the security, or if Holder incurs
any costs incident to the collection of the indebtedness evidenced hereby or the
enforcement or protection of the security, Maker and any indorsers hereof agree
to pay a reasonable attorney's fee, all court and other costs, and the
reasonable costs of any other collection efforts.

         Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto. No
failure to accelerate the indebtedness evidenced hereby by reason of default
hereunder, acceptance of a past-due installment or other indulgences granted
from time to time, shall be construed as a novation of this Note or as a waiver
of such right of acceleration or of the right of Holder thereafter to insist
upon strict compliance with the terms of this Note or to prevent the exercise of
such right of acceleration or any other right granted hereunder or by applicable
laws. Unless otherwise specifically agreed by Holder in writing, the liability
of Maker and all other persons now or hereafter liable for payment of the
indebtedness evidenced hereby, or any portion thereof, shall not be affected by
(1) any renewal hereof or other extension of the time for payment of the
indebtedness evidenced hereby or any amount due in respect thereof, (2) the
release of all or any part of any collateral now or hereafter securing the
payment of the indebtedness evidenced hereby or any portion thereof, or (3) the
release of or resort to any person now or hereafter liable for payment of the
indebtedness evidenced hereby or any portion thereof. This Note may not be
changed orally, but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification or discharge is sought.

         To the extent permitted by applicable law, Maker hereby waives and
renounces for itself, its heirs, successors and assigns, all rights to the
benefits of any appraisement, exception and homestead now provided, or that may
hereafter be provided by the Constitution and laws of the United States of
America and of any state thereof in and to all of its property, real and
personal, against the enforcement and collection of the obligations evidenced by
this Note.

         The indebtedness and other obligations evidenced by this Note are
further evidenced and/or secured by (1) the Mortgage, (2) the Guaranty
Agreement, and (3) certain other instruments and documents as may be executed
from time to time by Maker.

         All agreements herein made are expressly limited so that in no event
whatsoever, whether by reason of advancement of proceeds hereof, acceleration of
maturity of the unpaid balance hereof or otherwise, shall the interest and loan
charges agreed to be paid to Holder for the use of the money advanced or to be
advanced hereunder exceed the maximum amounts collectible under applicable laws
in effect from time to time. If for any reason whatsoever the interest or loan
charges paid or contracted to be paid in respect of the indebtedness evidenced
hereby shall exceed the maximum amounts collectible under applicable laws in
effect from time to time, then, ipso facto, the obligation to pay such interest
and/or loan charges shall be reduced to the maximum amounts collectible under
applicable laws in effect from time to time, and any amounts collected by Holder
that exceed such maximum amounts shall be applied to the reduction of the
principal



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balance remaining unpaid hereunder and/or refunded to Maker so that at no time
shall the interest or loan charges paid or payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts permitted from time to
time by applicable law. This provision shall control every other provision in
any and all other agreements and instruments now existing or hereafter arising
between Maker and Holder with respect to the indebtedness evidenced hereby.

         This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, except to the extent that
Federal law may be applicable to the determination of the Maximum Rate.

         As used herein, the terms "Maker" and "Holder" shall be deemed to
include their respective successors, legal representatives and assigns, whether
by voluntary action of the parties or by operation of law. In the event that
more than one person, firm or entity is a maker hereunder, then all references
to "Maker" shall be deemed to refer equally to each of said persons, firms
and/or entities, all of whom shall be jointly and severally liable for all of
the obligations of Maker hereunder.

         IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized manager as of the date first above written.


                                           MAKER:

                                           LANDAIR TRANSPORTATION
                                           PROPERTIES, INC.



                                           By: /s/ Richard H. Roberts
                                           Title: President





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